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TaxBuzz Top 5 - Potential Changes to Crypto Tax Reporting Rules, Mayors Want Changes to Food Delivery Taxes & More

TaxBuzz Top 5 - Potential Changes to Crypto Tax Reporting Rules, Mayors Want Changes to Food Delivery Taxes & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Lawmakers Seek to Repeal Crypto Tax Reporting Rule

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Credit: BlackJack3D/Getty Images

Some Republican members of Congress are advocating for the repeal of a Biden-era tax reporting requirement that mandates brokers to provide the Internal Revenue Service (IRS) with information on cryptocurrency transactions, including those conducted through decentralized finance (DeFi) platforms. This rule, established under the 2021 infrastructure law, aims to enhance tax compliance within the rapidly expanding crypto sector.

Per the Wall Street Journal, critics argue that the rule imposes excessive burdens on the crypto industry and may stifle innovation by subjecting decentralized platforms to stringent reporting standards. They contend that the decentralized nature of DeFi platforms makes it challenging to comply with traditional reporting requirements, potentially hindering the growth of this emerging financial ecosystem.

Proponents of the rule assert that it is essential for closing tax loopholes and ensuring that cryptocurrency investors fulfill their tax obligations. The IRS has previously expressed concerns about underreporting of income from crypto transactions and views the reporting requirement as a tool to improve tax compliance.

This ongoing debate showcases the tension between encouraging innovation in the financial technology sector and ensuring effective tax regulation. 

2. IRS Updates "Where’s My Refund?" App & Adjusts 2025 Tax Brackets

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Credit: HABesen/Getty Images

As tax season gets underway, the IRS has made key updates to its "Where’s My Refund?" tool, allowing taxpayers to track their refunds with more detailed status updates. CBS News reports that the agency has expanded the system to provide clearer explanations for delays, including verification issues or additional review requirements.

In addition to the app improvements, the IRS has adjusted tax brackets for the 2025 tax year to account for inflation. While these changes won’t affect the current tax season, they will impact returns filed in 2026. The standard deduction, income tax brackets, and other tax thresholds have been updated to prevent "bracket creep," where inflation pushes taxpayers into higher tax brackets even if their purchasing power remains the same.

Taxpayers are encouraged to file electronically and opt for direct deposit to receive refunds as quickly as possible. The IRS estimates that most refunds will be issued within 21 days for filers who submit accurate and complete returns. However, those claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) should expect delays, as additional fraud prevention measures are in place.

With these updates, the IRS aims to improve transparency and streamline the refund process for millions of taxpayers.

3. New Jersey Revamps Property Tax Relief Application Process for Seniors

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Credit: SelectStock/Getty Images

New Jersey is overhauling its property tax relief application process to better serve senior citizens and disabled homeowners. Starting in February 2025, individuals aged 65 and older, along with disabled homeowners, will utilize a unified application form to access three distinct property tax relief programs: the ANCHOR program, the Senior Freeze, and the forthcoming Stay NJ initiative.

Spotlight News notes that this change aims to simplify the application experience by consolidating multiple forms into one and standardizing income definitions across programs. The change addresses longstanding concerns about the complexity and redundancy in the application processes for these relief programs.

The Stay NJ program, set to launch in early 2026, promises significant property tax reductions for eligible senior homeowners. However, questions about its long-term financial sustainability persist, especially given New Jersey's existing structural budget challenges.

By implementing these changes, New Jersey aims to make property tax relief more accessible and user-friendly for its senior and disabled residents, ensuring they can more easily benefit from the assistance available to them.

4. Alabama Mayors Raise Concerns Over Food Delivery Tax Loophole Impacting City Revenues

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Alabama mayors are raising alarms over a tax loophole related to food delivery services, arguing that it is rapidly eroding municipal revenues and could set a precedent for other states. The issue stems from inconsistencies in how sales taxes are applied when food is delivered across city boundaries, leaving some municipalities short on tax revenue.

Traditionally, sales taxes are collected at the point of sale, but with the rise of food delivery services, determining where the tax should be applied has become more complicated. Some transactions are not being taxed correctly, either due to ambiguities in tax codes or differences in local tax laws. Per AL.com, mayors across Alabama -- including those from Decatur, Montgomery, and university cities like Tuscaloosa -- are pushing for legislative action to clarify the rules and ensure cities receive their fair share of sales tax revenue.

This challenge is not unique to Alabama—other states with complex local tax systems, such as Texas, California, and New York, could face similar revenue losses if they do not address how taxes are collected on digital and delivery-based services. As food delivery continues to grow nationwide, cities may need to update their tax structures to prevent further losses and maintain funding for essential services.

5. New York’s Wealth Tax Debate Intensifies Amid Federal Funding Uncertainty

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Credit: Alexander Spatari/Getty Images

With uncertainty surrounding federal funding, New York lawmakers are once again considering a wealth tax as a way to stabilize the state budget. Spectrum News 1 reports that Governor Kathy Hochul’s proposed budget faces potential revenue gaps, particularly if federal aid is reduced, putting pressure on state leaders to explore alternative funding sources.

Progressive lawmakers have renewed calls for taxing high-net-worth individuals, arguing that a wealth tax could provide a steady revenue stream without placing additional burdens on middle- and lower-income residents. Proposals include higher tax rates on multimillionaires and billionaires, as well as levies on investment gains and other high-value assets.

Opponents, however, warn that implementing such a tax could push wealthy residents to relocate, potentially reducing overall tax revenue. New York has already seen significant migration among high-income earners, particularly to lower-tax states like Florida. Business leaders and fiscal conservatives argue that raising taxes on the wealthy could further destabilize the state’s economy.

As budget negotiations unfold, the debate over a wealth tax will remain a focal point, with lawmakers weighing the need for new revenue against the potential economic consequences. The final decision could set a precedent for other states considering similar measures.

Which headline this week most interests you?

Feature Image Credit: Kenneth Cheung/Getty Images

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Rebekah Barton

Rebekah Barton

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